What could Windsor do with a billion dollars?

1. Eliminate all municipal infrastructure deemed in “poor” or “very poor” condition, according to the city’s first inventory management plan released in December;

2. Reconstruct or build 1,000 kilometres of roads;

3. Get rid of all of Windsor’s potholes by resurfacing 3,000 kilometres of existing roads;

4. Rebuild or lay 500 kilometres of underground sewer pipe;

5. Become the greenest, most active city in history by developing 3,000 one-acre city parks;

6. Canada’s largest indoor aquarium, Ripley’s in Toronto, cost a mere $130 million; with the rest: aquatic complexes for each of Windsor’s other nine wards (and throw in free parking!);

7. Or what about something bold? Windsor could buy the Toronto Maple Leafs for $1B (maybe less after they missed the 2014 playoffs).

It’s not just a matter of having the political courage to borrow today at the expense of taxpayers tomorrow.

City treasurer Onorio Colucci said less than half Windsor’s available debt ceiling of a billion dollars would cover the costs associated with remedying all the city’s infrastructure currently deemed in “very poor” condition. But he said that, even if doable and desirable, that would mean turning the entire city into a construction zone with “huge gridlock” everywhere.

“Incremental is better,” said Colucci. Windsor today is spending $113 million a year on capital projects, more than double the amount spent annually a decade ago, while at the same time cutting the municipal debt load in half.

As part of its 2014 budget deliberations, city council committed an extra $10 million in capital spending in each of the next five years.

And it’s not like that billion dollars is a gift.

“Like I said before … the hard part is repaying,” said Colucci.

Using a quick calculation, Colucci said borrowing $400 million to get rid of Windsor’s inventory of “very poor” infrastructure, based on a 20-year repayment at five per cent interest, would require an eight-per-cent hike in property taxes.

What could our city do with a billion dollars?

After more than a decade of governing the municipality using a strict pay-as-you-go capital budgeting strategy, coupled with a dogged pursuit of debt reduction, Windsor is now in a position where city council could go to the banks tomorrow and borrow $1 billion or more to spend on anything from roads, sewers and bridges to arenas, parks and buses.

The same provincial department recently called in to help rescue Amherstburg from its deep-debt fiscal nightmare has given Windsor the green light to borrow massively — if it so chooses.

According to the 2014 “annual repayment limit” set by the municipal finance policy branch of the Ministry of Municipal Affairs and Housing and tailored to each municipality’s financial situation, Windsor has been given an additional long-term borrowing capacity of $87.3 million per year.

“We are nowhere close to the max,” city treasurer Onorio Colucci told city council Monday. “We could issue another billion dollars in debt over 20 years and still be within the limit,” he added.

But Mayor Eddie Francis said there’s little likelihood of that happening, even if a new batch of big spenders is elected to city council in October.

Francis said “no claim can be made in the fall” that the city has been reducing its debt load and holding the line on taxes at the expense of neglected infrastructure.

“We’ve been spending a record amount on capital,” he said. “We’ve been spending more (on infrastructure) than in the ’90s when times were good and taxes were being raised and new debt was being issued,” he added.

Francis said when he became mayor and council first embarked on its debt reduction strategy, the bond raters who would meet annually with the municipality “kept saying you’ve got to borrow money. The automatic assumption was you must not be investing in capital.”

“They now get it,” said Francis.

Through “efficiencies,” finding other savings and doing things differently, he said Windsor was able to show that capital spending did not have to be tied to the accumulation of more and more long-term debt. He cites the example of the inherited Canderel debt being paid off early, resulting in annual savings on interest of about $2.5 million per year — an amount that city administrators no longer have to find in each year’s budget.

Windsor’s current debt load is just over $100 million, with 2014 being the first year the city has more money socked away in reserve funds than what is owed to outside lenders. Most of the city’s recent big capital investments, like the 400 City Hall Square building ($30 million), WFCU Centre ($65 million) and Huron Lodge ($42 million), are already paid for, while the just-opened $78-million downtown aquatic complex will be fully paid off by next year.

“It’s a good position to be in,” said Francis. Only about $40 million of the remaining total debt is city-only (for a Lou Romano sewage plant expansion), with the shared balance attached to the Essex-Windsor Solid Waste Authority and to social housing.

The province sets a municipality’s 2014 annual debt repayment limit by looking at its 2012 total annual revenues from all sources ($770.5 million in Windsor’s case) and then calculating its net revenues (for example, by deducting government grants), which for Windsor is $491.3 million. The permitted annual repayment limit is a quarter of the net revenues ($122.8 million for Windsor), less the existing annual debt charges (which are $35.5 million) — $87.3 million.

To make it easier for the municipalities to understand the potential of their long-term borrowing power, the province provides a helpful debenture table “for illustration purposes only.”

In Windsor’s case, maxing out its new repayment capacity would allow it to borrow anywhere from $358 million, based on a five-year repayment at seven per cent interest, to $1.1 billion, based on a 20-year period at five per cent interest.

“The borrowing is the easy part … the hard part is repaying,” said Colucci. Every $4 million needed in annual debt servicing is the equivalent of increasing Windsor tax bills by one per cent.

Politicians can get carried away with how easy it is to borrow money now and not having to worry about who repays it in the future. “A little debt can become a larger debt which then becomes a big debt … it can become addictive,” said Colucci.

“I don’t see any likelihood whatsoever of the city changing direction,” said Ward 9 Coun. Hilary Payne, who this week became the first council incumbent to announce he’s running for re-election in the fall.

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